How to lose a billion dollars?

[2HOTinPHX]

Take the cash option......

The $1.765 billion jackpot is for a sole winner who opts for payment*through an annuity, doled out over 30 years. Winners almost always take the cash option, which was estimated at $774.1 million.

So glad we don't bother playing. 774 million ain't what it used to be.... LOL.

 

[bobandsherry]

Take the cash option......

The $1.765 billion jackpot is for a sole winner who opts for payment*through an annuity, doled out over 30 years. Winners almost always take the cash option, which was estimated at $774.1 million.

So glad we don't bother playing. 774 million ain't what it used to be.... LOL.

I'd find a way to survive with the after tax remnants. [emoji857]

 

[2HOTinPHX]

Yes but would you be comfortable with retiring with that amount or would you do one more year? [emoji6]

 

[Texas Proud]

Wow.. that is a 7% discount factor... kinda high in today's world...

 

[timbervest]

Why not say "hey I just won $774.1 million" and not worry about it?

 

[2HOTinPHX]

Why not say "hey I just won $774.1 million" and not worry about it?

To me it's just disappointing that after all the hype about it being 1.7 Billion splashed all over suddenly it's not even 1 Billion....the glass is less than half full now unless you want to take 30 years to drink it.

Well I guess we get what we deserve...chasing those odds is pretty ridiculous to begin with. So I guess it's to be expected...

 

[dmpi]

The biggest winner: The IRS.

 

[marko]

I would be outraged if I ever won.

All those years of saving, planning, being careful and wise with money........all of that effort and time wasted, all of it for nothing! Now my hard earned portfolio is nothing but pocket change. Bah!

(But a private jet would be nice)

 

[dixonge]

$56Million per year for 30 years. I'd take that one. My Dad is 30 years older than me and still kickin' so the math works. Hire an accountant for aggressive tax avoidance. Use private jet services (I mean, don't buy your own - what a headache!).

 

[DrRoy]

Yes but would you be comfortable with retiring with that amount or would you do one more year? [emoji6]

The downside is that people come and hound you for money, and some lose their friends and family.

 

[dmpi]

I would be outraged if I ever won.

All those years of saving, planning, being careful and wise with money........all of that effort and time wasted, all of it for nothing! Now my hard earned portfolio is nothing but pocket change. Bah!

(But a private jet would be nice)

This is the exact reason why I don't buy lotto tickets. Furthermore I should add that after you reach the point of having more than you'll spend in a lifetime, having yet even more money isn't going to really do anything.

 

[jollystomper]

I would be outraged if I ever won.

All those years of saving, planning, being careful and wise with money........all of that effort and time wasted, all of it for nothing! Now my hard earned portfolio is nothing but pocket change. Bah!

(But a private jet would be nice)

I would not say wasted . You have built the discipline to deal with large amounts of money that a lot of lottery winners do not have. As well as knowing how to stay under the radar .

 

[Andre1969]

One thing I never understood about these lotteries, if you take the annuity, is it indexed to inflation, or no? For instance, if this one pays out $56M over 30 years, is it just a flat $56M each year, where the true value gets eroded by inflation? If that's the case, in the final year, that $56M could easily be chiseled down to around $25-30M, at best.

Still, there are worse problems to have. Although, I seriously wouldn't know what to do with that kind of money.

 

[twirler]

The Powerball, a tax on people who are bad at math.

 

[JoeWras]

The downside is that people come and hound you for money, and some lose their friends and family.

My cousin's daughter didn't win the lottery, but she became a mid-level TV actress. She's a recurring regular on a top 10 rated show.

It completely changed her life, and not all for the good.

I don't know what she makes, but it is probably about a million or two per year. No big lottery. But she's hounded by everyone both on the monetary and fame factor.

I haven't seen her since she hit it big. She only sees direct family now. I guess the extended family can be creeps.

 

[aaronc879]

One thing I never understood about these lotteries, if you take the annuity, is it indexed to inflation, or no? For instance, if this one pays out $56M over 30 years, is it just a flat $56M each year, where the true value gets eroded by inflation? If that's the case, in the final year, that $56M could easily be chiseled down to around $25-30M, at best.

Still, there are worse problems to have. Although, I seriously wouldn't know what to do with that kind of money.

The annuity started at around $13M after tax and went up 5% every year until you got like $50M in the last few years. You would not want to take the annuity if you are over 40 years old IMO. I would take the cash option put maybe $10M in a money market then put the rest in S&P 500 index and hope it beats 5% average per year. That would result in more money long term than the annuity with more access to big money if needed/wanted. The cash option after tax was still almost $400M. So what if that is less than 25% of the advertised jackpot, it is still a lot of money. I think I could get by on that but I would have had to win to make sure.

 

[MarieIG]

I would not turn it down - but managing that amount of money - responsibly - would be work.

 

[aaronc879]

I would not turn it down - but managing that amount of money - responsibly - would be work.

I don't think it would be that difficult. Of course I would have to win to be sure

Just put some in a money market and most in a S&P 500 index fund. When the market is up take money from the index fund, when equities are down take from the money market. Not sure why it has to be more complicated than that. I may decide to make it more complicated by holding out 20% or so for play money to invest in individual stocks but that isn't necessary.

 

[Qs Laptop]

The Powerball, a tax on people who are bad at math.

Plenty of people don't win the lottery the first few thousand times they play it.

 

[Winemaker]

My lottery dream was modeled after some real estate agents were handing out flyers for the sale of a California winery/hunting lodge/home. About 2/3 of the acreage was forest, and was advertised that there were deer and bear habitat. The home was very modest but was very modern, and the hunting lodge had butchering facilities, freezers, and gun safes. The vineyard was well kept and the excess grapes grown were under under a long term contract. I always thought it would be a great donation to The Wounded Warriors Foundation, wounded vets could hunt/fish and the grapes/wine would be sold and used for the facility and Foundation.

I buy a ticket when the jackpot gets to $500 mil, I don't need the money.

 

[Chuckanut]

I thought the traditional answer to that was to buy an airline for two billion dollars. But, I guess these days, that's no longer true.

 

[Chuckanut]

The Powerball, a tax on people who are bad at math.

I would add one word to the above definition - voluntary.


The Powerball, a voluntary tax on people who are bad at math.

 

[Aerides]

If the glass half full means $700mil, I'm glad to have it.

And I dare say good investments might outpace the annuity? But who cares at that point.

 

[Cayman]

I'd be ok with a planned "loss" of half of the winning dollars...might put half or more in a family foundation supporting 1 primary focus that we care about. Sunset the foundation at 20 or 30 years.

 

[Ian S]

AARP has an article explaining some Powerball issues. When considering annuity vs lumps sum, if you die before the annuity fully pays out, the rest goes to your estate. You really need a smart team of financial advisors to help with proper planning. More here: https://www.aarp.org/money/taxes/info-2023/lottery-winners-payout-strategy.html